Mr Abbott says he's committed to the scheme but is open to negotiation

ABC News

Prime Minister Tony Abbott has signalled his signature multi-billion-dollar paid parental leave scheme may face changes, as the Government works to have it passed by the Senate.

The Federal Government has come under pressure to scale back the scheme, given the dire economic forecasts it released in the Mid-Year Economic and Fiscal Outlook.

The Government has set the scene for widespread cuts to programs and services in the May budget, including possible changes to the National Disability Insurance Scheme.

In light of the dismal budget conditions, Opposition Leader Bill Shorten has called on the Government to "reconsider" the PPL scheme, calling it a "$22 billion white elephant".

But Treasurer Joe Hockey has defended it as a "fully funded" measure that will boost productivity.

Mr Abbott says he is "committed" to the scheme but has indicated he is open to negotiation on it.

"Obviously it has to get through the parliament and that may well involve some negotiation," he said.

"But I am committed to the scheme that we took to the election. I believe that's a fair scheme."

The scheme is slated to begin in 2015 and would give a baby's primary carer six months leave on the mother's full pay, up to an annual salary of $150,000.

It will cost $5.5 billion a year, partly paid for by a 1.5 per cent levy on big business - to be offset by a corporate tax cut.

Labor says the scheme is too generous. The Greens, who currently hold the balance of power in the Senate, say they would support it if the Government capped the payment to those earning $100,000 a year.

Abbott confident NDIS and parental leave can succeed

Mr Abbott says he believes both the parental leave scheme and the disability insurance scheme can be successfully introduced.

"I don't think we're in an either/or situation - a good deal for people with disabilities versus a good deal for new parents," he said.

"I think if we get the economic fundamentals right, if we do the design work right, we can have an excellent national disabilities insurance scheme and at last, an overdue, fair dinkum paid parental leave scheme."

The NDIS was initiated by the Gillard government and passed Parliament last May with bipartisan support.

It will be paid for with an increase to the Medicare Levy, and an extra $14.3 billion over seven years committed by the Labor government in the 2012-13 Budget.

But Treasurer Joe Hockey, who released the Abbott Government's first budget statement on Tuesday, has signalled changes to the roll out of the scheme.

"We are determined to deliver the NDIS but it has to be affordable," he told AM.

"I know it might surprise some, but you can actually deliver a program in full but also make it affordable.

"The bottom line from my perspective is we have to find ways to deliver services within an existing budget framework rather than promise on the never-never things with a blank cheque."

The Minister responsible for the NDIS, Assistant Minister for Social Services Mitch Fifield, says the scheme is running over budget and he is worried about the costs of administration and overheads.

It is currently being trialled in four areas - Tasmania, South Australia, Victoria's Barwon region and the Hunter Valley in New South Wales.

The NDIS is designed to cater to the individual needs of more than 400,000 people with significant and permanent disability.

Labor's Disability Reform spokeswoman Jenny Macklin says the Government must rule out changes like limiting the level of support or slowing the rollout.

"There is no evidence whatsoever that it is ineffective of inefficient," she said.

The Mid-Year Economic and Fiscal Outlook forecast combined deficits over the four years of the forward estimates of $123 billion, higher unemployment and massive revenue write downs.